Just a quick note to say that Housed has a report on a County Court judgment on a claim for failure to put deposit in scheme and notify tenant within 14 days. (Stankova v. Glassonbury 10th March 2008, Gloucester County Court. Initial report apparently via Consumer Action, no reference or link)
Result - mandatory 3 x deposit award, with no set off against arrears (because mandatory). It didn’t matter that the landlord had very belatedly put the deposit in a scheme, or that the tenant had left after s.21 notice, or that that the landlord raised deductions from the deposit at Court. The court was apparently persuaded that deductions were irrelevant on the basis that a statutory scheme included arbitration for disputes about returning or retaining deposit monies. Apparently the DJ wasn’t happy making the award but found he could do no other.
There is an unaddressed issue about validity of an s.21 Notice, as the tenants had moved out.
Thanks Housed. Useful stuff for many tenants.
There is an interesting contrast betwen this judgement and article just posted to Property Law (subscription website) -”Tenancy Deposit Schemes”. That article suggests landlord may escape sanction if s/he complies before hearing.
Who is the article by?
I’d admit that I wasn’t clear on this point myself, although I’d have thought the landlord would have a stronger case if they complied before issue, rather than hearing. We appear to have a County Court judgment that late compliance makes no odds, but I would like to see an authoritative judgment, otherwise, it may be a lottery by District Judge. Given the nature of the beast, this higher court case is unlikely to happen, though.
There is support for the view that Parliament intended that the sanction of payment of three times the deposit would only apply where the landlord has not complied by protecting the deposit before the hearing. Para 84 of the Explanatory Memorandum to The Housing (Tenancy Deposits)(Presribed Information) Order 2007 says “If a landlord has not complied with the Act by the time of a court hearing, the court must order him to pay to the tenant an amount equivalent to three times the deposit”. This seems to make more sense and avoids a substantiall windfall for the tenant where the deposit is protected and there is no loss.
Michael,
Certainly it is an arguable point, although that would leave the landlord free to not use a deposit scheme right up to the point of being notified of a hearing date, with no penalty (save the s.21 notice validity, which itself would only be an issue for possession proceedings). But Stankova was a first order County Court judgment and therefore not binding in any way. No doubt other decisions will go otherwise.